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I was having a chat yesterday with Andy Young of Stripe, telling him about Satago (my startup) and our recent strategy change to focus on accounts receivable automation, and told him that I didn’t think there was such as thing as a startup “pivot” because it’s more like a handbrake turn.

He tweeted my comment today and it got a bit of attention so I just wanted to expand on my thoughts…

"Startups don't really 'pivot' so much as handbrake turn: out of control, screaming, no idea if you'll stop or flip over.." –@Major_Grooves

I’ve never liked the term “pivot”. A pivot is when you change direction with one foot placed on the ground. It’s soft, it’s gentle, it’s quick and once you change direction with your pivot, you know which way you’re facing. Dancers pivot. Startup don’t.

For one thing, a pivot takes an instant. A handbrake turn takes a fair bit longer. Now, startups may be agile and nimble and all that, but that doesn’t mean that your tw0-developer team startup can just change its model overnight. It takes weeks and months of planning and re-factoring. It may require a complete re-write of your app’s engine. In our case implementing a new pricing model required some significant changes to Satago under the hood and we’ve still got lots to do…

Pivots are not scary. Handbrake turns are… but not necessarily for everyone in the car. The CEO may think he is a “Fast & Furious” style driver, but everyone else in the car is probably crapping themselves, eyes wide in terror and knuckles white, gripping whatever they can to try and stay seated!

Also, with a handbrake turn, you’re not really 100% certain what direction you’ll end up facing. Hopefully you’ll end up facing in the direction you planned, but if you hit a bump in the road you might end up somewhere you did not expect. Try not to flip the car.

So I propose we ditch the term “pivot” and start talking about “startup handbrake turns”.

I remember walking in to Seedcamp Week Berlin and shamefully turning on my 4 year old Packard Bell laptop in a sea of Macs. Similarly, if you walk in to Red Rock Cafe in Mountain View, or St Oberholz in Berlin, 90% of the people there are using a Macbook. It seems that Macs rules startups.

Yet a few years ago I remember reading a blogpost where some Venture Capitalist said that if he ever walked in to a startup’s office and all the employees were working on Apple computers, he would walk straight out and never make an investment. The argument being that such a startup clearly did not know how to spend wisely.

At the time I pretty much agreed with him, and always figured if I ever had a startup I would frugally equip the company employees with the very best of Dell.

Over the past six months, I’ve come to realise how wrong both I, and the long-forgotten-to-remain-nameless VC, have been.

Early last year when my trusty, but under-powered Windows 7 Packard Bell laptop died, I dutifully popped along to PC World to buy a new laptop. They barely had any stock, but I had no choice – I needed a computer that day and PC World is usually your only option for a same-day computer purchase. So I walked away with a HP laptop, equipped with Windows 8, and most importantly to me – a promised 5-7 hour battery life.

After only about a week I took the laptop back, because I assumed the battery was defective; it would only ever last about 2.5 hours, meaning after half a morning working somewhere remote I would already be getting battery warnings. Well, it turns the battery is not defective, it is just crap. I don’t know what they have done to Windows 8 to make it such an energy hog, but there is no way that thing would ever get 8 hours battery life unless I used it Jedi-style with the screen switched off and no WiFi.

Every time I moaned about it on Twitter the poor HP social media folk would direct me towards the same “Improving battery performance” page on the HP website, where the guidance to extend battery life is basically to not use the laptop.

The other small issue is Windows 8. I thought it would just take a little getting used to. Nope. Windows 8 sucks. It sucks bad. I can scarcely believe that a company that employs actual professionals to make products to be used by consumers, could make something so fundamentally unintuitive and unusable.

I could have just about lived with these problems if I was ignorant about the grass on the other side of the fence. But nope, with a Apple fanboi co-founder that was never going to be a possibility. I could see him smirking every time I had to reach for the powerpack for my laptop, while he would complain “oh, I’ve been using my Macbook for half the day and it only has 5 hours battery left. What should I do?”

The final straw was when I met some investors the other day and they were genuinely shocked that I didn’t have a Mac. Clearly not the guy I quoted from the blogpost.

So the other day I picked up a 14″ Macbook Air from Gatwick airport. It was about £120 cheaper than buying it elsewhere and knocking off VAT makes it about the same price as my rubbish HP laptop.

Experience since using it? Amazing. Battery life seems to be a genuine 11h. So refreshing not to have to keep one eye on the battery indicator and have the power pack nearby at all times. Size – it’s so light. Everything about it feels better. The touchpad is amazing and the multi-finger swiping feels instinctive almost straightaway. I won’t go on about how good it is, but the most important thing is that I already feel more efficient… and I also don’t get rage at my laptop like I did with the HP.

So, thanks to the combined crapiness of HP laptops and Windows 8 user experience I am now ex-Windows and pro-Mac. Even if they costs a little more, Macs seem to make it up with value.

Now if anyone can tell me why it would ever be worth a business paying £900 for a Mac Thunderbolt display rather than a £150 Dell screen, I’m all ears.

I needed to amend some company bank details and my bank, Santander, insisted that I had to either post in the changes or send a fax. I haven’t seen a fax machine in years, however a quick tweet did point me towards two online services. HelloFax, a Y Combinator company, and eFax, a old-school looking service with the sort of design that makes you grimace.

Both companies offer a 30 day free trial. I’ll be honest, I was not intending using either service beyond this one fax.

I tried HelloFax first of all, but because I was faxing a 0800 number, HelloFax would not send the fax, which made them kinda useless. I then tried eFax and despite the fairly ugly user interface it did the job, and that’s what matters.

Whilst HelloFax have a free option, with multiple price tiers thereafter, eFax has one flat monthly subscription and requires you to enter your credit card at sign-up. *Warning bells*

Well yes I forgot to cancel the account before the 30 days free trial were up. Fair enough, I would pay their £7.50 monthly subscription for my one fax sent and cancel the account.

I could not find how to cancel the account from their fairly confusing UI, so I emailed their support to be told that I could only cancel the account by phoning customer support.*Warning bells again*

I haven’t phoned them yet. I don’t want to out of principle. If they can take my money online then they can cancel my account online. I don’t need them to “help me”. I think it was the credit score companies that used to be notorious for only allowing you to cancel your subscription to your personal credit reports by phoning them up, whereupon the customer service representative would try to persuade you that you really needed to pay £10/month to know your credit score at any time. Yeah right.

I then double-checked my bank account to see what they had charged me. Since starting my free trial on 26th March, I have been charged £7.38 on 28th March, refunded £7.38 on 3rd April, charged £7.38 on 17th April, and charged £16.61 on the 29th April. Quite how that equates to a 30-day free trial and a £7.50/month subscription I’m not sure.

Everybody wants to reduce customer churn as much as possible, but it should be achieved by having a great product and great incentives not to leave, not massive obstacles to prevent you leaving. I might very well have wanted to use eFax regularly in the future, since it does what it says it does – sends faxes – but after this experience I’d rather buy a fax machine (presuming they still exist).

As far as I can see, eFax’s Terms don’t even say that you have to phone them. Just that you have to contact a customer service representative. I’m pretty sure an email to customer service counts!

Give them their due, they’ve been quite responsive on Twitter and did apparently try to phone me today. Hopefully they’ll be able to sort this tomorrow without me having to ask my bank to start several chargebacks against them.

I’m not massively enamoured by the “Fax SaaS model”, so I wonder how eFax and HelloFax are doing. I guess they must be on to something if YC invested in them.

On the related topic of startup metrics, take a look at this beautiful metrics dashboard which works via integration with Stripe: https://buffer.baremetrics.io/dashboard Nice!

Update (2 May2014): I spoke to eFax customer support (calling from Ireland) and I have to admit the guy was quite helpful. There was (I think) some kind of error on my account because the number I had faxed was 0800 it was more expensive than their normal free trial allows. Hopefully the extra charges will be refunded soon. As expected they offered me a deal to stay with them longer, but it was not a hard sell and I actually agreed to it. Why not have a fax number for £3.50/month?! So… I still think it’s pretty cr@ppy to force customers to cancel on the phone in this day-and-age – they probably could have got the same effect with automated emails to entice me to stay, but on the other hand it worked for them. So the lesson is – remove your online cancellation button kids!

In the conversations around Scottish independence, Scotland often gets compared to Norway. This is mostly because of similar populations, comparable levels of gingerness, and of course the oil.

If Scotland did gain independence, we would never end up wildly oil-rich like the Norwegians, since we are clearly past “peak oil”. The general consensus seems to be that the reduction in “subsidy” from the UK government would be more or less offset by us taking 90% of the oil tax revenues, leaving us financially in a status quo. Gross over-simplification, but bare/bear* with me.

I prefer to look at another Scandinavian country for comparison – one which is similarly comparable population-wise, but doesn’t have the black-swan event of finding a trillion dollars worth of oil in the back garden: Denmark.

One question keeps creeping to to my mind when I casually make this comparison: why has Denmark (population ~5.6 Million) got so many globally recognised companies, compared to Scotland (population 5.3 Million)?

Try this exercise: name the top global Danish companies you can think of off the top of your head. Maybe you can’t name many, but you’d probably be surprised to discover how many companies you have heard of day-to-day are actually Danish. Then try the same with global Scottish companies. This is not meant to be an exhaustive review – rather an exercise in finding “global companies you have heard of.”

Novo Nordisk – known for diabetes treatments – employs 38,000 people around the world.

Genmab – admittedly not one most people would have heard of (I have because of my pharma/biotech background) – but it’s exactly the sort of mid-sized biotech company with promising drugs and partnerships that Scotland (actually the whole of the UK) is lacking.

Carlsberg – yes we all know the beer of questionable quality that the Danes pretend they hate to see leave, but it’s really a very big drinks company employing around 45,000 people worldwide.

Vestas – it’s the largest wind turbine company in the world, whose market share is apparently decreasing due to increased global competition (I’ll guess from China) but it’s still top dog, and the company that I (at least) hear most often in discussion about wind energy.

Clothing – maybe no mega giants, but I’m constantly surprised by the number of brands I know that turn out to be Danish. e.g. Hummel and Jack and Jones (part of a bigger group called Bestseller).

Internet companies – ok, they all seem to hot-foot it off to Silicon Valley as soon as they do well so they don’t really count, but quite a few decent tech companies started in Denmark – e.g. customer care darling, Zendesk. Podio was also born in Copenhagen, but sold out a couple of years ago.

Lego – coolest toy company in the world? ‘Nuff said!

Scotland

Have we got any global healthcare companies based in Scotland? The only one I could think or was ProStrakan, and they seem to have been acquired by a Japanese company since I last looked at them. I can’t think of any others.

Drinks companies – we used to have White & MacKay – it’s not really on Carlsberg’s scale, and it’s owned by United Breweries Group of India now anyway. I suppose we have Barr (they make Irn Bru don’t you know) but I don’t really think they are particularly global and they tried to sell themselves, sorry I mean merge, with Britvic recently anyway. We have lots of globally known whisky brands, but most of them are owned by non-Scottish parent companies.

Shipping – nope. I think we just desperately cling to making warships for the UK navy. No global players there.

Banking – well 10 years ago we could have pointed to Royal Bank of Scotland and Bank of Scotland with pride. Now they are an embarrassment. There are a few other big finance companies based in Scotland, such as Scottish Widows, but not exactly world-known companies. Ach crap, I just looked up Widows and even they are a subsidiary of Lloyds. Oh well.

Wind power – nope, none that I know of. We just beg for Vestas to come build something in Dundee.

Clothing – well I suppose we have tartan, and Harris tweed. Still, no global companies I can think of. A few globally known brands like Pringle and, uhhh, did I mention kilts are Scottish?

Oil stuff – ok we have Wood Group based in Aberdeen. They’re big (I think), but they don’t really have that “heard of globally” thing about them. Given how much oil we have in the backyard, it’s kinda surprising to me we didn’t end up with a really big oil company based in Scotland, the way Norway has Statoil.

Internet companies – actually, next time some d*ckhead tells you all Internet companies have to be based in London or they will die, ask them what the UK’s highest-valuation Internet company is. They’ll probably say Huddle, Mind Candy or Satago, but you can tell them about Skyscanner – based in Edinburgh. What – the not-that interesting fairly old flight comparison website that has presumably been killed by Expedia and Kayak? Yes – that one. It’s doing rather well in fact and recently took funding from Sequoia Capital, the most successful Internet company VC firm in the world, valuing it at $800 M – in fact it’s their only UK investment to date I think. I hope they don’t relocate to the States.

Lastly honourable mention for Rockstar Games – publisher of games such as Grand Theft Auto and based in Edinburgh (where they fled to after deciding they were too cool for Dundee, where they started). Nevertheless, they’re not really Scottish any more, having been bought by Take Two Interactive – a US company. Well, at least they still make games in Scotland.

So there we have it. Denmark has a ton of massive global companies and seems to really punch above its weight given the country’s size, whereas Scotland has a couple of finance companies that nearly destroyed the country’s economy, and a nice bus company.

So the question is – why? No time to speculate here, but it’s a subject I would love to study more if I had the time. Doubtless others have already tried, so if you know any references I should have a look at – please mention so in the comments. In the meantime, I blame London.

* I never know which one it is and I can’t be bothered looking it up any more.

I’ve always had a love for a well-designed friend referral system. Indeed,when I was working for Rocket Internet, one of my tasks was to re-design the invite-a-friend system for Westwing.de. More on that later…

If you’re really clever/lucky you create such a shareable system, that you end up with a viral coefficient of over 1.0 (meaning each user, on average, brings 1 additional user to the service) and… woo-hoo… hockey stick growth!* Hopefully this is something that I’ll be able to apply to Satago.

So here are a few friend-referral systems that I think are particularly good or notable. Upfront disclosure – links are my referral links, since, well, that’s kinda the point of them.

Dropbox

One of the most successful recent friend-referral systems was Dropbox’s. Like many of the best referral systems it was a mutual-benefit system, meaning both the inviter and invitee received benefit from using the referrer’s link. When I first signed up to Dropbox, you would get your first 5GB of storage for free, but if you used a referral link from a friend you would get an extra 250MB storage, and of course the person who gave you the links for get an extra 250MB. It meant people were posting their Dropbox referral link all over the place to try and get extra storage, and people who were signing up were actively seeking out referral links.

Dropbox’s invite system has got more generous recently.

One Kings Lane & Westwing

As the original “inspiration” for Westwing, One Kings Lane gives us the standard flash sales shopping club model whereby everyone you invite gets a $15 voucher and for every shopper that you invite and makes a purchase, you receive a $15 voucher. However, One Kings Lane’s invite page is hideously designed.

At Westwing we had exceptionally high design standards, which sometimes made it difficult to get new features implemented quickly. I don’t think my final designs for the Westwing invite page ever got used, but I just checked the website and they have now updated their invite page and it looks really, really nice – much better than One King Lane’s. However the basic model is the same – you get a voucher, I get a voucher.

Westwing’s current invite page. Beautifully designed.

One Kings Lane’s invite page. Hideous.

Fab.com

That brings us to Fab.com, whom we unsuccessfully tried to “emulate” with Bamarang. I especially liked Fab’s invite friend system, because they not only had the usual shopping club voucher system, but they also added a kind of “prestige” system, whereby users who successfully invited lots of users would receive extra credit and free shipping. I think with Fab’s voucher credits they were especially good since they are additive, whereas usually with other websites you can only spend one voucher per transaction.

Fab invites

What’s more with Fab.com is that the whole site is designed to be shared – and every time you share something from Fab, to Facebook or Twitter, it is automatically a referral link, turning a natural instinct to share in to a potential source of free credits.

Big money

What I consider one of the most generous, or at least potentially lucrative, friend-referral systems, is from the UK’s Seedrs – the crowd-equity funding platform that I used to raise investment for Satago. If I refer someone to Seedrs who goes on to make an investment in one of their listed startups, I receive equivalent to 5% of their investment to make my own investments. So if someone logs on and makes £10k investments I will get £500 to invest in startups that take my fancy. Of course the chances are the startup will not be the next Facebook… but there could be some big wins there (like Satago of course!). Wow!

I’ve already suggested to Seedrs that they should allow a registered user to decide whether they take the whole 5%, or if it can be split with the person referred so that there is an incentive to use the referral links it becomes a mutual referral system, which I think always works better.

AirBnB

I just logged in to my AirBnB account to book some accommodation in Dublin and found that I had three £16 vouchers because three different people had signed up to AirBnB via my referral link. I don’t even recognise one of the links, so maybe that came via Twitter. Currently, AirBnB is not a mutual referral system, meaning only I get any reward for using the link, although I think AirBnB have gone through periods (maybe when they were newer) of making their referral system mutual. AirBnB does encourage you to share the listing of the place you have stayed at to Facebook, and that link is (presumably) also a referral link.

TransferWise

Transferwise is an excellent service for currency transfers. Started by some of the guys behind Skype, it is both genius and super-simple – the money you transfer from A to B never actually moves – they just match it against people moving money in the other direction, thus totally removing the costs of transfer. Clearly Transferwise benefits from having as many people using the system as possible (i.e. to make the service actually work) and hence have quite a generous referral system. Currently, if you refer three people to the system who actually use it, they give you £50 in cash. In fact Transferwise was my inspiration for this post as I made my 3rd referral this week and got my £50. Woo-hoo! I have heard of some people referring dozens of people to Transferwise and making quite a bit of referral cash.

Honourable mentions

Not particularly inventive, but the host I use for the Satago WordPress blog is TSOHost, and partially the other reason I wrote this blogpost. I found them due to a recommendation on someone else’s blog and made sure I used their referral link so they would get some reward. When I set up my girlfriend’s NGO, Kids Have a Dream, on a new website, I used TSOHost again but used my own referral link, meaning I made £7.50. Huzzah!

Lastly, I hope that the referral system in Satago will work – for every person you invite to use the system, you get credits which you can use to get data reports out of the system.

My blog post yesterday about the difficulties of finding a technical co-founder generated a lot of good discussion over at Hacker News.

Something that was frequently mentioned was an issue that I have also been wrestling with: whether or not to stick with the original language that Satago was built with.

Satago was built with Java, using the Tapestry framework. I knew that if/when it came to looking for a tech co-founder, and potential employees, it would be more difficult to find Java developers than, say, PhP or Ruby developers. Many Java developers are currently working in banking or big enterprise platforms, which pays very well, whereas PhP developers are much more common in web startups, and Ruby-on-Rails is currently much more trendy (as is Nodejs).

By only looking for Java guys as potential co-founders I am restricting my pool of potential founders. I’ve always said that for the right co-founder I would not mind to switch language, but at the same time if the site is already in Java, it would be a shame to start from scratch in other language.

This subject does seem to neatly polarise opinion amongst my developer friends, and the people that commented on the Hacker News thread:

The two camps are:

(Paraphrasing collective opinions) “You’d be mad to change programming language now. The site is well built, the code is good, and Java is a great language for you to scale with the sort of application you’re going to build. Wait for the right guy, they will come along. “

and

“Honestly, I think your biggest problem is Java, it’s just not going to hit a large enough cross section of 20/30 year olds, that want to take a risk, that are into tech.”

“That should be the least of your concerns. Finding a co-founder is hard enough without expecting him to know Java. Pick based on other criteria, then let him rebuild it as he sees fit. There’s a good chance that even a Java guy would end up refactoring it beyond recognition. It’s exactly what I would do.”

As a non-technical guy, I’m not really in a good position to judge the technical merits of Java vs. not Java.